SBC, Cisco to work together

Cisco Systems will team with SBC Communications to help run other companies' computer networks, a key deal in Cisco's bid to sell more Internet gear to telecommunications firms.

SBC will use Cisco equipment to offer managed networking services to clients -- in essence, building and running networks for companies that either don't have the expertise to do so themselves or would rather pay someone else to do it.

The two firms won't discuss financial details of the deal, which they will officially announce today. But it gives both parties something of value.

San Jose's Cisco, which sells most of its gear to large corporations, will see more of its equipment installed at SBC, which operates phone and data networks and has 60 million Internet access lines nationwide. Cisco Chief Executive Officer John Chambers has made boosting telecom sales one of his top priorities.

SBC, in turn, will have a better shot at selling its managed services to large corporations by working with Cisco's sales team, which already has relationships with many of those firms.

"It's a very strong marketing machine," said Ken Presti, research director of networking at the IDC research firm. "That will open up a lot more doors for those services than (SBC) would get on their own."

Clients will be able to choose from a number of networking services that SBC will install and run for them, such as security systems or phones that run over data transmission lines.

For small and midsize companies, signing up for such services may be cheaper and easier than buying all the necessary equipment and hiring people who know how to run it.

"It makes a lot of sense for customers who may not have that in-house capability," said Mike Reddout, vice president of emerging channels at San Antonio's SBC.

Larger companies also may prefer to pay someone else for such services rather than maintaining large and costly information technology departments.

Such large companies long have been Cisco's most dependable customers, keeping it afloat during the past two years while Internet service providers slashed their spending.

But Cisco does not see SBC's managed services as a potential threat to its own traditional business.

"From a purely fiscal point of view, you could say this is another way to touch the same customers," Roland Acra, senior vice president and chief technology officer for the Cisco division that targets telecom service providers.